RINs prices have gone way up since the beginning of the year and we thought it might be helpful to offer a little explanation of how RINs flow through the fuel supply chain. This presentation illustrates the renewable volume obligation of an example refiner:

• In the case of our refiner, he needs 53.9 million D6 Renewable Fuel RINs to meet his RVO.
• The problem is there just aren't that many RINs on the market to purchase.
• So...to satisfy the RVO, the refiner buys D4 and D5 RINs.
• This is why RIN prices have gone up and grown closer together recently - D4 RINs are setting the price for D5 and D6 RINs.

  The April edition of the Bubble Map shows that Mid Continent price differentials to the coast have gone down since our last update in January when Brent was $18 over WTI. The WTI/WCS differential is the narrowest since last October.

 

Last month Dave Hackett spoke at the AFPM Annual Meeting about California's Low Carbon Fuel Standard. His presentation, which is available on our website, these questions: Will the regulation be adjusted to reflect market conditions? How hard do regulators push for new technology development? How do we know this innovation is occurring fast enough to meet the schedule set forth by the regulation?

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Stillwater Associates is a transportation energy consulting company. We help our clients understand how fuels get from the source to the service station. If your company is in need of expert advice, please let us know.

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